The Rising Tide of Missouri VC Funding
Reach out to Brett Calhoun, Managing Director & GP at Redbud VC, at brett@redbud.vc to learn about Redbud, and subscribe to our newsletter here.
Venture capital is often the lifeblood of high-growth startups, providing not only funding but also strategic guidance, network expansion, and, often, a vote of confidence that can make all the difference. While the coastal cities of the U.S. have long been the dominant players in venture capital, a new wave of VCs is emerging from the heartland, challenging the status quo and reshaping the innovation landscape. Among them, Missouri Venture Capital Funds are making a significant impact, and we at Redbud VC are in the driver’s seat.
Redbud VC: Driving Missouri’s Startup Ecosystem
As Redbud VC, we are an early-stage venture capital fund and studio based in Columbia, Missouri, fueling the state’s tech startup scene. In 2022 alone, our Redbud VC Fund I made six investments in Missouri companies, making us one of the most active investors in the state. Our reach extends across the US in robotics, FinTech, AI, etc., as we invest monetary and social capital in tech founders.
Recently, we raised a Fund II, with a remarkable 95% of the capital coming from Missouri itself. The University of Missouri System, among others, has backed this fund, demonstrating a strong belief in our investment thesis and the potential of Missouri’s burgeoning tech ecosystem.
Our commitment to nurturing local startups doesn’t stop at providing capital. We are actively involved in fostering a vibrant, innovative environment at the University of Missouri-Columbia, the flagship state university in Missouri. We are supporting an on-campus accelerator, which we hope will catalyze student ventures across the system’s four campuses.
Going a step further, we have committed to starting one company per year in Missouri over the next three years. This commitment highlights our belief in the potential of Missouri’s entrepreneurial talent and the state’s ability to foster successful tech startups.
Beyond Investments: Building a Stronger Ecosystem
In addition to our investment and startup creation activities, we have been instrumental in organizing the inaugural Missouri Startup Weekend in Columbia, MO. Events like these are crucial for fostering a healthy startup ecosystem as they provide networking opportunities, expose participants to the startup culture, and often serve as the breeding ground for innovative ideas.
We have also taken the initiative to create Flyover Tech, a growing community of founders, investors, and ecosystem builders passionate about building tech startups in the so-called “flyover states.” Flyover Tech’s mission is to consolidate the thousands of tight flyover ecosystems into one family, thus creating a more unified and stronger network.
The Bigger Picture: Missouri VC Scene
Our success and impact are part of a broader trend of vibrant VC activity in Missouri. Other venture capital firms like Cultivation Capital, SixThirty, Capital Innovators, Ascension Ventures, and RiverVest are also making significant contributions to Missouri’s startup ecosystem across various sectors.
Like us, these firms are not just providing capital but are actively involved in building an environment conducive to the growth and success of startups. Together, we are investing in late seed-stage FinTech, InsurTech, Cyber Security companies, tech-enabled startups, strategic healthcare ventures, and early-stage life science companies, to name a few.
Looking Ahead
At Redbud VC, we are spearheading the rise of venture capital in Missouri, bringing about a significant shift in the U.S. startup landscape. As more capital, resources, and talent flow into the state, we anticipate Missouri’s emergence as a significant hub for tech startups. According to Pitchbook’s Q1 2023 NVCA Venture Monitor, Missouri accounted for 0.91% of venture deals in Q1 2023, the highest percentage since 2014 and the third-lowest deal value in the last decade. That said, EquipmentShare raised $290M in April, nearly triple the $118M all Missouri startups raised in Q1. If included, this would have given Missouri the highest percentage of deal value in the last decade at 1.10%.
Our commitment to Missouri’s startup ecosystem extends beyond merely investing in companies. We are nurturing the next generation of entrepreneurs, building a supportive community, and creating a platform for innovation to thrive. Our work is a testament to the transformative power of venture capital when used as a tool for ecosystem building, not just as a financial instrument.
With the emergence of us and other Missouri VC funds, the narrative of venture capital being confined to the coasts is gradually eroding. There’s a newfound recognition that innovation and entrepreneurship can, and do, flourish beyond the traditional tech hubs. The heartland states, often overlooked, are now being recognized for their untapped potential.
As we continue to invest in, support, and build companies in Missouri, we can anticipate a ripple effect. Other VC firms may follow our lead, recognizing the value of investing in ‘flyover’ states. This could lead to a more geographically diverse startup ecosystem in the U.S., promoting innovation on a wider scale and opening up more opportunities for entrepreneurs everywhere.
The Missouri venture capital scene is a compelling reminder that great ideas and vibrant startup ecosystems can emerge anywhere. The key is having the right support structures in place. With VC funds like us leading the charge, Missouri’s future as a startup hub looks promising.
Our impact stretches beyond the state’s borders. We’re setting a precedent for how venture capital can play a vital role in ecosystem development, offering a blueprint that other states and regions can emulate. As this new wave of venture capital continues to rise, it’s clear that the future of startup innovation in the U.S. will be written far beyond the confines of the traditional tech hubs. And Missouri, with us at its helm, will be at the forefront of this exciting narrative.
Reach out to Brett Calhoun, Managing Director & GP at Redbud VC, at brett@redbud.vc to learn more and subscribe to our newsletter. Originally published here https://www.scale-vc.com/post/the-rising-tide-of-missouri-vc-funding
